It’s been a very bad week for Democratic Senate candidate Jeff Greene. First he’s hammered by the media and his opponent for breaking the Cuban embargo on what appears to have been a party cruise to Havana in 2007, and then called out for misrepresenting the incident to voters.
Now Sunday’s edition of the St. Petersburg Times details Greene’s ties to mortgage fraud. As the Miami Herald’s political blog comments, “This is the kind of report that can kill a Democrat’s campaign.”
Greene has taken heat for shorting the housing market, and defended himself as an individual who has simply “lived the American dream.” But as the Times reports, there may be something more at work:
Democratic U.S. Senate candidate Jeff Greene says he had nothing to do with creating the sub-prime mortgage mess that made him fabulously wealthy.
He was simply a savvy investor who “could see that the housing market was imploding” and lucky enough to make more than $500 million by betting against it.
But he wasn’t just a spectator to the housing collapse. Four years ago, Greene was party to precisely the kind of deal that decimated the market.
Greene insists he did nothing wrong. Yet the way he handled the deal left an opening for massive fraud and put him uncomfortably close to a man now under federal indictment.
The setting: this remote desert town at the edge of Death Valley. At a project called La Mirage, Greene converted 1950s-era military housing from apartments to 300 condos. In the summer of 2006, just as he was starting to make his bets against the sub-prime housing market, official records show that Greene’s company unloaded the units, some for as much as $165,000. The buyers turned out to be people who never intended to own the properties or pay back the loans. […]
Within 18 months, all of the La Mirage buyers defaulted on their loans and every condo was in foreclosure. Low-income tenants, still paying rent and unaware their apartments had been sold, found themselves on the street. Lenders recouped about $25,000 per unit when the properties went up for auction. Banks — and ultimately U.S. taxpayers who bailed out the banks — were left holding the bag on nearly $34 million of worthless paper.
Much, much more here.